Sheridan, Inc., sells $302,000 of its accounts receivable to factors at a 3 percent discount. The firm’s average collection period is 90 days.

What is the dollar cost of the factoring service? (Round answers to the nearest whole dollar, e.g. 5,275.)

Dollar-cost of factoring

per month

Dollar-cost over 90 days

What is the simple annual interest cost of the loan? (Do not round intermediate calculations. Round answer to 1 decimal place, e.g. 15.1%.)

What is the effective annual interest cost of the loan? (Round answer to 2 decimal places, e.g. 15.25%.)